Governance, Risk, and Compliance Handbook: Technology, Finance, Environmental, and International Guidance and Best Practices

CHAPTER 50

CORPORATE GOVERNANCE: INDONESIA

Lawrence Wasserman, PhD

50.1 BACKGROUND

50.2 CORPORATE GOVERNANCE PRACTICES

50.3 CURRENT ENVIRONMENT AND FUTURE TRENDS

(a) Indonesia Forum Corporate Governance Initiatives: Good Governance Framework

(b) FCGI Assessment of and Recommendations for Indonesia Governance

(i) Asian Development Bank—Assessment of Indonesia Corporate Governance

(ii) World Bank Corporate Governance Country Assessment Report on the Observance of Standards and Codes, Republic of Indonesia, August 2004

(iii) Corporate Governance 2002 Report on Institutional Investor Survey Conducted by IICD/IICG

50.4 CONCLUSION

50.5 REGULATIONS

NOTES

REFERENCES

50.1 BACKGROUND

Indonesia is the world's largest archipelagic state and home to the world's largest Muslim population. The nation declared its independence after Japan's surrender in World War II. After four years of intermittent negotiations, recurring hostilities, and UN mediation, the Netherlands agreed to relinquish its colony.

Indonesia is a unitary state, governed by President Sukarno, leader of the national freedom struggle and military dictator, for most of its modern history. Indonesia's first direct presidential election was held in 2004 and won by Susilo Bambang Yudhoyono; it was the largest one-day election in the world.

Although the national language is Indonesian (called Bahasa Indonesia in Indonesian) and the population is overwhelmingly Muslim, there are several hundred diverse linguistic and ethnic groups across ...